The company said Friday that net income dropped to $14.5 million, or $1.50 a diluted share, for the quarter ended July 1, compared with $41.2 million, or $4.33 a share, a year earlier. Analysts expected the company to earn $2.39 a share for the latest period, according to Thomson Financial/First Call.

Revenue rose 2.2% to $604.5 million from $591.5 million, with a boost from Quest Education, which the company acquired in August 2000, and improved sales at its cable division and its Kaplan's test preparation and Score! businesses.

Advertising revenue, however, dropped 12% and the climate remains soft, the company said.

Revenue at its newspaper-publishing division slipped 7% to $212.8 million from a year earlier, while operating income sank 38% to $23.1 million. Advertising at the Washington Post newspaper, in particular, decreased 13% to $142 million, with a 40% drop in classified-recruitment advertising.

The company blamed higher newsprint expenses, as well as weaker advertising, for the sharp drop in the unit's earnings.

Revenue for its magazine-publishing division dropped 20% to $92.2 million, while operating income fell 59% to $8.5 million. The company said the decline in earnings was largely a result of a 26% decrease in advertising revenue at Newsweek, as both its domestic and international editions sold fewer pages.

At Washington Post's television-broadcasting operations, revenue declined 6% to $83.7 million. Operating income slid 12% to $37.8 million, as particularly national advertising slumped at each of the division's stations.

Its cable-television operations recorded revenue of $96.5 million for the second quarter, up 8% from a year earlier, but the division's cash flow, which represents operating income excluding depreciation and amortization expense, fell 8% to $32.4 million. The company blamed the cash-flow drop primarily on higher programming expenses and costs associated with the launch of digital services.

At its education division, revenue rose 24% to $85 million, excluding revenue from the recently acquired Quest Education. The unit narrowed its operating loss to $11.7 million from $16.4 million. The company cited higher enrollments and higher rates at its test-preparation and professional-training programs for the improved results.